The Herrick Payoff Index (HPI) uses volume, open inerest, and price to signal bullish and bearish divergences in the price of a future or options contract. The use of open interest in the calculation of the HPI means the indicator can only be used with futures and options. The HPI is based off of two premises regarding open interest: 1. Rising Open Interest: When prices rise … [Read more...]
Herrick Payoff Index : Application and Chart
John Herrick developed the Herrick Payoff Index. It tracks volume, price and open interest into an aggregate value that is meant to capture trends and their reversals. HPI uses daily high and low prices, volume and open interest - preferably of all contracts from a period of at least three weeks. HPI applies these to prices of the most active delivery month. Instead of using … [Read more...]
Herrick Payoff Index : The Concept
Herrick Payoff Index is useful for the early spotting of changes in price trend direction. So we can use the Payoff Index to distinguish trends that will most likely be short-lived from those that are destined to continue. The Herrick Payoff Index is a good tool to forecast the money changes into future contracts. It uses analyzing of volume, price changes, and open interest … [Read more...]